It is important to understand the basics of the money we earn and how we spend it. To be financially “well” we should be able to live within the amount we earn monthly, and not have any bad debt. There are few of us who can claim such a position into today’s world.
“Wouldn’t it be nice if our creditors understood this and instead of harassing us each month; rather offer us a hand of support? If they could help us find a pathway forward enabling us to pay back our debts to them.
“It’s not like we don’t want to pay our debts, we just can’t find a way to afford to pay them.”
The Underlying Problem:
We are increasingly seeing a demand for Financial Education and Debt Counselling as a means for individuals to escape the trap of excessive debt. We find individuals with many different types of debt - with a range of both formal and informal providers. This is a vicious circle - both caused by and leading to individuals using debt to repay debt. Creditors can solve this by counselling and educating their debtors, at the same time as collecting the amounts owed.
Most Collectors follow a traditional but ethical collections model. An alternative to traditional debt collections is to help the debtor repay the money by offering debt counselling and financial wellness training, and by doing so maintains a good customer relation which presents a win-win solution for all parties.
The collections teams are skilled in both Debt Collecting and Debt Counselling. The collectors achieve higher results by better understanding the debtor’s position. Where possible, the debtor is referred to a Financial Wellness Program which results in the individual being better able to live within their means, and pay down all their debts.
In addition to these methods, this approach to collections is unique because we always attempt to look at each client from a holistic perspective. Offering basic financial education and counselling, debtors are assisted in structuring repayment plans that suit both creditor and debtor. Debt Counsellors are also experienced in helping debtors arrange consolidation and bridging loans which can get their debts repaid far faster than traditional collection strategies.
In this model Collectors collect on
Avoiding the Debt Crisis
Botswana is faced with a debt crisis. Recent International Monetary Fund (IMF) reports on Botswana’s economy have repeatedly pointed out that the growth in individuals unsecured borrowing is unsustainable and a cause for future concern.
The challenges that businesses face in getting their customers to repay their debts are thus growing. This has resulted in our collection companies expanding into financial education and debt counselling, as well as debt collections. They all go hand-in-hand.
You Can Help Yourself
There are two things that all of us can do however, to start to achieve a debt free lifestyle. They are Debt Counselling - to get out of debt, and learning how to manage your money by getting a Financial Wellness Education.
What is Debt Counselling?
Debt Counselling is a process that one can engage in, whereby a qualified person assists you to understand, calculate, negotiate and plan a way forward for you to get out of debt. There are several steps involved in this process; it is not a quick fix.
Educate Yourself So You Don’t Get Back Into Debt
It is important to seek Financial Education so that you understand your money and how to manage it to protect you from getting back into a similar situation again.
“Empower Yourself to achieve Financial Wellbeing”
Author: Oarabile Tuelo – Debt Counselling and Collections Manager with S.C.I. Collections with SCI Training (PTY) Ltd. © S.C.I. Training began as a BQA accredited training institution specialising in Financial Education. We now also offer Debt Collecting services for companies with bad debtors and Debt Counselling services for those in financial distress. For help and information contact them on 3180243 or 75797242 or firstname.lastname@example.org.